Canada saw $41.8 billion in new upstream deals agreed in 2017. Below, CanOils data is used to provide an overview of the 10 largest individual deals. For analysis on every upstream deal in Canada in 2017, please refer to the monthly reports available for download through CanOils here.
10. Waterous takes controlling stake in Northern Blizzard
Total acquisition cost: C$467 million
Waterous Energy Fund agreed a deal with the shareholders of Northern Blizzard Resources to take a 67% stake in the company in April. Northern Blizzard, now known as Cona Resources Ltd., had a net debt position of just around C$223 million at the end of the first quarter, meaning this acquisition saw Waterous assume its stake in the company for a total of C$467 million after this debt and the C$3.60 paid per share are both taken into account.
9. Cenovus sells conventional assets in Suffield and Alderson areas of Alberta
Total acquisition cost: C$472 million
Following its huge transaction with ConocoPhillips in March (below), Cenovus embarked on a significant asset sales program that dominated M&A headlines in Canada for the rest of the year. The smallest of the four agreements – which all made it into the top 10 – was this deal that saw International Petroleum Corp. enter the Canadian E&P space by acquiring conventional oil and gas assets in southern Alberta. The company was originally formed as a spin-off of Sweden’s Lundin Petroleum and listed on the TSX back in April. IPC also holds assets in France, Malaysia and the Netherlands.
8. Paramount Resources merges with Trilogy Energy
Total acquisition cost: C$852 million
Paramount Resources completed two upstream deals in 2017. The larger of the two, this C$852 million acquisition of the remaining 85% stake in Trilogy Energy that it did not already hold, was completed at the end of September. The cost includes Trilogy’s net debt position. After taking the production included in this merger with Trilogy and its other acquisition – a C$460 million all-cash asset purchase from Apache Corp. – Paramount is currently estimating average production of 95,000 boe/d for Q4 2017.
7. Cenovus sells its Weyburn unit to Whitecap
Total acquisition cost: C$940 million
Cenovus agreed to sell its Weyburn unit in Saskatchewan to Whitecap Resources in mid-November. This deal completed just before 2017 came to a close and was featured in CanOils’ most recent M&A report, which can be downloaded here. In light of this acquisition, Whitecap is now expecting to produce between 73,000 – 75,000 boe/d in 2018, an increase of 25% over earlier estimates.
6. Cenovus sells its Pelican Lake heavy oil operations to Canadian Natural
Total acquisition cost: C$975 million
The first of Cenovus’s four major asset sales to be announced this year was a deal involving its heavy oil operations at Pelican Lake. Canadian Natural, which also operates heavy oil assets at Pelican Lake, also took full ownership of the Pelican Lake sales pipeline as part of the deal.
5. Cenovus sells Palliser area assets to Torxen and Schlumberger
Total acquisition cost: C$1.3 billion
All of Cenovus’s asset sales this year were aimed at retiring a bridge loan associated with the ConocoPhillips acquisition described below. The largest of the four divestments agreed by the company was this deal with Torxen Energy and Schlumberger, which saw Cenovus part with 54,000 boe/d in the Palliser area of southeastern Alberta.
3. & 4. Canadian Natural and Shell both acquire a 10% stake in the Athabasca Oil Sands Project from Marathon Oil
Total acquisition cost: C$1.6 billion each
Concurrent to the C$10.9 billion deal between Canadian Natural and Shell for the 60% stake in the AOSP described below, the two companies both agreed a C$1.6 billion deal with U.S.-based Marathon Oil Corp. to take a 10% stake each in the same project. When these deals completed in May, it marked the complete exit for Marathon from the Canadian E&P sector.
2. Canadian Natural acquires 60% stake in the AOSP from Shell
Total acquisition cost: C$10.9 billion
In what was the largest deal of 2017 for about three weeks back in March, Canadian Natural agreed to acquire a 60% stake in the AOSP from Royal Dutch Shell. The deal also included Shell’s 100% interest in the Peace River Complex in situ assets, including Carmon Creek, and a number of undeveloped oilsands leases.
1. Cenovus Energy acquires oilsands and Deep Basin assets from ConocoPhillips
Total acquisition cost: C$17.7 billion
Shortly after Canadian Natural’s deal with Shell, Cenovus agreed to purchase ConocoPhillip’s 50% interest in their SAGD partnership along with certain Deep Basin gas assets. This would eventually turn out to be the largest upstream deal in Canada for 2017. The deal included almost 300,000 boe/d of production at a cost of C$59,400 per flowing barrel.
For more information on all ten of these deals, click here to access all of the CanOils monthly M&A reviews for 2017.